At a time when the demand for sustainable textiles and garments is at an all-time high and India being the among the most sought-after textile hub for brands across the globe, Finance Minister, Nirmala Sitharaman, in Union Budget 2026, has announced a five-part integrated programme for the textile sector. The FM in the Budget speech announced the Tex-Eco initiative to promote globally competitive and sustainable textiles and apparels.     

Sitharaman has also announced the National Fibre Scheme for self-reliance in natural fibres such as silk, wool and jute,
man-made fibres, and new-age fibres. “I propose Samarth 2.0 to modernize and upgrade the textile skilling ecosystem through collaboration with industry and academic institutions. Further, I propose to set up Mega Textile Parks in challenge mode. They can also focus on bringing value addition to technical textiles. 

"The textile measures announced in the Budget 2026–27 represent an effort to drive a coordinated push to modernise India’s textile ecosystem across the value chain. This approach links raw material security and sustainability with skilling, scale, and advanced manufacturing capabilities, while preserving employment-intensive segments. If executed in an integrated manner, these interventions can shift the sector from fragmented, labour‑heavy production towards higher‑value, technology‑driven growth aligned with global sourcing and sustainability trends," says Naveen Malpani, partner and consumer and retail industry leader, Grant Thornton Bharat.

Empowering Weavers

Every corner of India has its own unique handcrafted and handwoven textile heritage. Though global luxury brands charge a huge premium for handcrafted and handwoven apparels, the irony is that in India, the weavers and craftspersons are diminishing. They are increasingly switching to power-loom which significantly helps reduce costs and also enables them to price more competitively.

In the Union Budget 2026, the FM has announced the Textile Expansion and Employment Scheme to modernise traditional clusters with capital support for machinery, technology upgradation and common testing and certification centres. A National Handloom and Handicraft programme has also been announced to integrate and strengthen existing schemes and ensure targeted support for weavers and artisans.

“I propose to launch the Mahatma Gandhi Gram Swaraj initiative to strengthen khadi, handloom and handicrafts. This will help in global market linkage and branding. It will streamline and support training, skilling, quality of process and production. This will benefit our weavers, village industries, One-District–One-Product initiative and rural youth,” the FM said.

According to Sumit Arora, President (Apparel), Fabindia, “The integrated measures announced such as the National Fibre Scheme, the Textile Expansion and Employment Scheme, and the National Handloom Programme will reinforce domestic manufacturing while enabling sustainable livelihoods. The emphasis on eco-conscious production, enhanced skilling through Samarth 2.0, and the development of mega textile parks will drive value addition, improve competitiveness, and ensure that artisans remain central to India’s growth story and the Make in India vision.”